Assignment 6 (Due: December 30, 2009, before 01:00pm)

Things that really matters for success : CRITICAL SUCCESS FACTORS

It’s often difficult to see the “wood for the trees” in business because many important matters compete for your attention. Likely to said, it can be extremely difficult to get everyone in the team pulling in the same direction and focusing on the true essentials. That's where Critical Success Factors can help. These are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project. By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project. As a common point of reference, it will help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.

As we try to browse the internet and many other resources, we can find and will discover that there are potential but confusing variety of definitions and uses of Critical Success Factors.

Definitions

Critical Success Factor

An element of organizational activity which is central to its future success. Critical success factors may change over time, and may include items such as product quality, employee attitudes, manufacturing flexibility, and brand awareness. This can enable analysis.

Critical Success Factor

Any of the aspects of a business that are identified as vital for successful targets to be reached and maintained. Critical success factors are normally identified in such areas as production processes, employee and organization skills, functions, techniques, and technologies. The identification and strengthening of such factors may be similar.

Critical Success Factor

Is a business term for an element which is necessary for an organization or project to achieve its mission. For example, a CSF for a successful Information Technology (IT) project is user involvement.

In the Re.ViCa project a critical success factor is defined as follow:

A critical success factor is a factor whose presence is necessary for an organization to fulfill its mission - in other words, if it is not present then its absence will cause organizational and/or mission failure.

Those are just some of various definitions that we could find when we will try to look for the critical success factors.

History/Background

The idea of identifying critical success factors as a basis for determining the information needs of managers was proposed by Daniel (1961) but popularized by Rockart (1979). The idea is very simple: in any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so. Rockart (1979: 85), by referring to Daniel (1961), gives the following as an example of the CSFs: new product development, good distribution, and effective advertising for the food processing industry - factors that remain relevant today for many firms.

As we start to discuss the Critical Success Factors, it is important to realize that the specific factors relevant for you will vary from business to business and industry to industry. The key to using Critical Success Factors effectively is to ensure that your definition of a factor of your organizations activity which is central to its future will always apply.

Therefore success in determining the Critical Success Factors for your organization is to determine what is central to its future and achievement of that future.

What is a Critical Success Factor?

Critical Success Factors are the critical factors or activities required for ensuring the success your business. The term was initially used in the world of data analysis, and business analysis.

Critical Success Factors have been used significantly to present or identify a few key factors that organizations should focus on to be successful.

As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization”.

Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways.
Critical Success Factors are strongly related to the mission and strategic goals of your business or project. Whereas the mission and goals focus on the aims and what is to be achieved, Critical Success Factors focus on the most important areas and get to the very heart of both what is to be achieved and how you will achieve it.

The term “Critical Success Factor” is used differently, due to ambiguity of the word “critical”. But whichever definition we may use, just be sure it is understood by all the managers.

Types of Critical Success Factor

Four Basic Types:

1. Industry - resulting from specific industry characteristics;
2. Strategy - resulting from the chosen competitive strategy of the business;
3. Environmental - resulting from economic or technological changes; and
4. Temporal - resulting from internal organizational needs and changes.

It is said that things that are measured get done more often than things that are not measured. Each CSF should be measurable and associated with a target goal. It’s not necessarily that you need exact measures to manage. Primary measures that should be listed include critical success levels or, in cases where specific measurements are more difficult, general goals should be specified.

Identifying Critical Success Factors is important as it allows firms to focus their efforts on building their capabilities to meet the CSF's, or even allow firms to decide if they have the capability to build the requirements necessary to meet Critical Success Factors.

Using the Tool: Summary Steps

In reality, it is said that identifying a CSFs is a very iterative process. The mission, strategic goals and CSFs are intrinsically linked and each will be refined as it is developed.

Below are the Summary Steps that used iteratively that will help us identify the CSFs for the business or project:

Step One: Establish your business's or project's mission and strategic goals.

This is the mission statements and the vision statements. Vision Statements and Mission Statements are the inspiring words chosen by successful leaders to clearly and concisely convey the direction of the organization. By crafting a clear mission statement and vision statement, you can powerfully communicate your intentions and motivate your team or organization to realize an attractive and inspiring common vision of the future.

Step Two: For each strategic goal, ask yourself "what area of business or project activity is essential to achieve this goal?" The answers to the question are your candidate CSFs.

Tip: How Many CSFs?

To make sure you consider all types of possible CSFs, you can use Rockart's CSF types as a checklist.

1. Industry - these factors result from specific industry characteristics. These are the things that the organization must do to remain competitive.
2.Environmental - these factors result from macro-environmental influences on an organization. Things like the business climate, the economy, competitors, and technological advancements are included in this category.
3. Strategic - these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.
4. Temporal - these factors result from the organization's internal forces. Specific barriers, challenges, directions, and influences will determine these CSFs.

Step Three: Evaluate the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Criticial Success Factors.

As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission, objectives and CSFs iteratively.

Step Four: Identify how you will monitor and measure each of the CSFs.

Step Five: Communicate your CSFs along with the other important elements of your business or project's strategy.

Step Six: Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable goals, it is useful to identify as specifically as possible how you can measure or monitor each one.

Examples of Critical Success factors

Statistical research into CSF’s on organizations has shown there to be seven key areas. These CSF's are:

1. Training and education
2. Quality data and reporting
3. Management commitment, customer satisfaction
4. Staff Orientation
5. Role of the quality department
6. Communication to improve quality, and
7. Continuous improvement

These were identified when Total Quality was at its peak, so as you can see have a bias towards quality matters. You may or may not feel that these are right or indeed critical for your organization.

The Critical Success Factors we have identified and use in the BIR process are captured in the mnemonic PRIMO-F

1. People - availability, skills and attitude
2. Resources - People, equipment, etc
3. Innovation - ideas and development
4. Marketing - supplier relation, customer satisfaction, etc
5. Operations - continuous improvement, quality,
6. Finance- cash flow, available investment etc

Key Points

Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or a project is well-focused and avoids wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals

References/ Sources:

http://www.mindtools.com/pages/article/newLDR_80.htm
http://rapidbi.com/created/criticalsuccessfactors.html#WhatareCSFs
http://informationr.net/ir/6-3/paper108.html
http://www.mindtools.com/pages/article/newLDR_90.htm

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Identify and discuss the steps for "critical success factors" approach?

What is a Critical Success Factor?

Critical Success Factors (CSF’s) are the critical factors or activities required for ensuring the success your business. The term was initially used in the world of data analysis, and business analysis.
Most smaller and more pragmatic businesses can still use CSF’s but we need to take a different, more pragmatic approach.
Critical Success Factors have been used significantly to present or identify a few key factors that organizations should focus on to be successful.
As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization”
Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals.

A slight distinction must be made when considering CSFs as a strategic driver at the organ-izational or enterprise level (as is done in this report). In this context, CSFs are more than just guiding principles; instead, they are considered to be an important component of a strate-gic plan that must be achieved in addition to the organization’s goals and objectives. While this distinction is subtle, it is intended to point out that an organization’s CSFs are not just to be “kept in mind”; their successful execution must drive the organization toward accomplish-ing its mission.
Many definitions of a CSF at the strategic planning level have already been provided in this report. In his seminal work on CSFs, Rockhart provides a useful summary of similar but dis-tinct definitions [
• key areas of activity in which favorable results are absolutely necessary to reach goals
9 This section relies heavily on the description of CSFs as documented in the original primer by John Rockhart and Christine Bullen [Rockhart 81]. Their work is still widely recognized as the initial definition of CSFs and the CSF approach. CMU/SEI-2004-TR-010 11
• key areas where things must go right for the business to flourish
• “factors” that are “critical” to the “success” of the organization
• key areas of activities that should receive constant and careful attention from manage-ment
• a relatively small number of truly important matters on which a manager should focus attention

4 Types of Critical Success Factor

1. Industry CSF's resulting from specific industry characteristics;
2. Strategy CSF's resulting from the chosen competitive strategy of the business;
3. Environmental CSF's resulting from economic or technological changes; and
4. Temporal CSF's resulting from internal organizational needs and changes.

Industry CSFs:
Every organization inherits a particular set of operating conditions and challenges that are inherent to the industry (or segment of the industry) in which it chose to do business. This results in a unique set of CSFs that organizations in a particular industry must achieve to maintain or increase their competitive positions, achieve their goals, and accomplish their missions. For example, consider an organization in the airline industry. As a member of this industry, the organization inherits CSFs such as “deliver on-time service” or “move away from the hub-and-spoke system.” Failure to achieve these CSFs may render the organization unable to stay competitive in its industry and may ultimately result in its exit.

Strategic CSFs:
these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.

Environmental CSFs:
To be successful, an organization must be mindful of the macro environment in which it op-erates. A closed organization—one that does not fully interact with its external environ-ment—cannot survive in the long term. As a result, an organization must acknowledge the18 CMU/SEI-2004-TR-010environmental factors that can affect its ability to accomplish its mission. Environmental CSFs reflect the environmental factors over which the organization has very little control or ability to actively manage. By making these factors explicit, the organization can at least be mindful of them and actively monitor their performance relative to them.Environmental CSFs describe such conditions as current socio-political issues, the industry’s regulatory environment, and factors such as seasonality. For example, the airline industry has been dramatically affected by terrorist activities, which have forced changes in airport opera-tions and scheduling and have brought about new regulations with which airlines must com-ply. Unfortunately, airlines have very little control over this problem

Temporal CSFs
CSFs are tied to the long-term planning horizon of an organization. Over the strategic plan-ning period the organization’s CSFs may remain fairly constant, adjusted only when the or-ganization makes major changes, such as changing its mission or the industry in which it competes. However, at one time or another, every organization encounters temporary condi-tions or situations that must be managed for a specific period of time, while continuing to maintain its performance in all other areas. These temporary conditions or situations can re-sult in temporal CSFs—areas in which the organization must temporarily perform satisfacto-
CMU/SEI-2004-TR-010 19
rily in order to ensure that its ability to accomplish its mission is not impeded.

Things that are measured get done more often than things that are not measured.
Each CSF should be measurable and associated with a target goal. You don't need exact measures to manage. Primary measures that should be listed include critical success levels (such as number of transactions per month) or, in cases where specific measurements are more difficult, general goals should be specified (such as moving up in an industry customer service survey.


Sample Success Factors

• Understanding of Market
• Marketing Variables
• Decision making

A Critical Success Factor Method

Start with a vision:
• Mission statement
• Develop 5-6 high level goals
• Develop hierarchy of goals and their success factors
• Lists of requirements, problems, and assumptions
• Leads to concrete requirements at the lowest level of decomposition (a single, implementable idea) Along the way, identify the problems being solved and the assumptions being made Cross-reference usage scenarios and problems with requirements
• Analysis matrices
• Problems vs. Requirements matrix
• Usage scenarios vs. Requirements matrix
• Solid usage scenarios
• Relationship to Usage Scenarios
• Usage scenarios or "use cases"; provide a means of determining:
o Are the requirements aligned and self-consistent?
o Are the needs of the user being met as well as those of the enterprise?
o Are the requirements complete
• Results of the Analysis

In an attempt to write good CSF's, a number of principles could help to guide writers. These principles are:

• Ensure a good understanding of the environment, the industry and the company – It has been shown that CSF's have five primary sources, and it is important to have a good understanding of the environment, the industry and the company in order to be able to write them well. These factors are customized for companies and individuals and the customization results from the uniqueness of the organization.

• Build knowledge of competitors in the industry – While this principle can be encompassed in the previous one, it is worth highlighting separately as it is critical to have a good understanding of competitors as well in identifying an organization's CSF's Knowing where competitors are positioned, what their resources and capabilities are, and what strategies they will pursue can have an impact on an organization's strategy and also resulting CSF's

• Develop CSF's which result in observable differences – A key impetus for the development of CSF's was the notion that factors which get measured are more likely to be achieved versus factors which are not measured. Thus, it is important to write CSF's which are observable or possibly measurable in certain respects such that it would be easier to focus on these factors. These don't have to be factors that are measured quantitatively as this would mimic key performance indicators; however, writing CSF's in observable terms would be helpful.

• Develop CSF's that have a large impact on an organization's performance – By definition, CSF's are the "most critical" factors for organizations or individuals. However, due care should be exercised in identifying them due to the largely qualitative approach to identification, leaving many possible options for the factors and potentially results in discussions and debate. In order to truly have the impact as envisioned when CSF's were developed, it is important to thus identify the actual CSF's, i.e. the ones which would have the largest impact on an organization's (or individual's) performance.

Here are the ideas that, used iteratively, will help you identify the CSFs for your business or project:

Establish
your business's or project's mission and strategic goals (click here for help doing this.)

Think
of business or project activity is essential to achieve this goal?"

Evaluate
the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Criticial Success Factors.As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission, objectives and CSFs iteratively.

Identify
how you will monitor and measure each of the CSFs.

Communicate
your CSFs along with the other important elements of your business or project's strategy.

Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable goals, it is useful to identify as specifically as possible how you can measure or monitor each one.


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References:
http://rapidbi.com/created/criticalsuccessfactors.htm[flash][/flash]l
http://www.sei.cmu.edu/reports/04tr010.pdf
http://www.mindtools.com/pages/article/newLDR_80.htm

Identify and discuss the steps for "critical success factors" approach?

In any field of endeavor, there are only two options you can associate to it – a success or a failure, so as to business. In a business it is guaranteed to succeed or to fail depending on how you cope up and handle those factors called, CRITICAL SUCCESS FACTORS. Paying attention to these specific factors will surely add up edge to one’s self to start towards a new and high level of performance. Also, it is therefore a must to appreciate the value of foundation in proper planning and preparing some design efforts prior making a start to deal with improvement program. Furthermore, it should be considered that the one of the most vital factors in any business transformation is to identify the above mentioned factors.

For some sources, critical success factor is defined as the following:

• “Critical Success Factor (CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.”

• Critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization”.

Critical Success Factors have been used significantly to present or identify a few key factors that organizations should focus on to be successful. The principle of identifying critical success factors as a basis for determining the information needs of managers as proposed by RH Daniel (1961 Harvard Business Review - HBR) has the following ideas:

In any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so.
The following as an example of generic CSF's:
• New product development,
• Good distribution, and
• Effective advertising
Factors that remains relevant today for many organizations.

Another examples of Critical Success factors

Statistical research into CSF’s on organizations has shown there to be seven key areas. These CSF's are:

• Training and education
  

• Quality data and reporting
  

• Management commitment, customer satisfaction
  

• Staff Orientation
  

• Role of the quality department
  

• Communication to improve quality, and
  

• Continuous improvement
  

These were identified when Total Quality was at its peak, so as you can see have a bias towards quality matters. You may or may not feel that these are right or indeed critical for your organization.

There are basic types of CSF, these are:
1. Industry CSF's resulting from specific industry characteristics;
2. Strategy CSF's resulting from the chosen competitive strategy of the business;
3. Environmental CSF's resulting from economic or technological changes; and
4. Temporal CSF's resulting from internal organizational needs and changes.

Each CSF should be measurable and associated with a target goal. You don't need exact measures to manage. Primary measures that should be listed include critical success levels (such as number of transactions per month) or, in cases where specific measurements are more difficult, general goals should be specified (such as moving up in an industry customer service survey). Form the identified types of CSF, there are also identified sources these mentioned factors:

Industry: There are some CSF's common to all companies operating within the same industry. Different industries will have unique, industry-specific CSF's. An industry's set of characteristics define its own CSF's Different industries will thus have different CSF's, for example research into the CSF's for the Call centre, manufacturing, retail, business services, health care and education sectors showed each to be different after starting with a hypothesis of all sectors having their CSF's as market orientation, learning orientation, entrepreneurial management style and organizational flexibility. In reality each organization has its own unique goals so while thee may be some industry standard - not all firms in one industry will have identical CSF's. Some trade associations offer benchmarking across possible common CSF's.

Competitive position or strategy: The nature of position in the marketplace or the adopted strategy to gain market share gives rise to CSF's Differing strategies and positions have different CSF's. Not all firms in an industry will have the same CSF's in a particular industry. A firm's current position in the industry (where it is relative to other competitors in the industry and also the market leader), its strategy, and its resources and capabilities will define its CSF's. The values of an organization, its target market etc will all impact the CSF's that are appropriate for it at a given point in time.

Environmental changes: Economic, regulatory, political, and demographic changes create CSF's for an organization. These relate to environmental factors that are not in the control of the organization but which an organization must consider in developing CSF's Examples for these are the industry regulation, political development and economic performance of a country, and population trends. An example of environmental factors affecting an organization could be a de-merger.

Demerger is the converse of a merger or acquisition. It describes a form of restructure in which shareholders or unitholders in the parent company gain direct ownership in a subsidiary (the ‘demerged entity’). Underlying ownership of the companies and/or trusts that formed part of the group does not change. The company or trust that ceases to own the entity is known as the ‘demerging entity’. If the parent company holds a majority stake in the demerged entity , the resulting company is referred to as the subsidiary. Demergers can also result from government intervention, usually by way of anti-trust/competition law, or through decartelization.

Temporal factors: These relate to short-term situations, often crises. These CSF's may be important, but are usually short-lived. Temporal factors are temporary or one-off CSF's resulting from a specific event necessitating their inclusion. Theoretically these would include a firm which "lost executives as a result of a plane crash requiring a critical success factor of rebuilding the executive group". Practically, with the evolution and integration of markets globally, one could argue that temporal factors are not temporal anymore as they could exist regularly in organizations. For example, a firm aggressively building its business internationally would have a need for a core group of executives in its new markets. Thus, it would have the CSF of "building the executive group in a specific market" and it could have this every year for different markets.

Managerial role: An individual role may generate CSF's as performance in a specific manager's area of responsibility may be deemed critical to the success of an organization. Managerial position. This is important if CSF's are considered from an individual's point of view. For example, manufacturing managers who would typically have the following CSF's: product quality, inventory control and cash control. In organizations with departments focused on customer relationships, a CSF for managers in these departments may be customer relationship management.

In an article written by Paul Lemberg, here’s how an individual can attain a new level of performance by identifying critical factors and dealing with the approach:

Step 1: Identify your critical success factors

The first step is to identify your special set of critical success factors. You may have thought this through in the past; you may think you know them intuitively. When asked "What matters?", many executives reflexively say things like sales, customers, people, or product development. These are all good answers, and they may be correct answers, but you will want to think deeper and broader. Below is a list to start you thinking. It is set in no particular order and contains only the most obvious factors. Review the list and circle areas you believe are critical to your enterprise. You may have to add other, more specific or subtle factors to the list to describe the critical influences on your business' success.

Distribution - this could be direct sales, telesales, third- party sales, etc.
Lead generation
Customer satisfaction
Referrals
Research
Product development
Production, including quality, costing, run-rates, etc.
Sufficient investment capital, sufficient working capital
Customer support / technical support
Quality assurance
Sales process / sales life cycle
Market research
Customer education
Sales compensation
Recruiting
Personnel retention programs
Expense management
Intellectual capital development
Training
Marketing communications
Logistics
Employee equity
Executive leadership
Training and development
Corporate goals / strategic objectives
Values and beliefs
Mission/purpose
Individual accountability
Productivity & effectiveness metrics
Internal communications
Strategic and tactical planning
Executive team
Board of directors/advisors

Be specific when you identify your factors. Don't say "people" when the issue is recruiting, employee satisfaction, training or compensation. Don't say "marketing" or "sales" when the issue is lead generation. Test your assumptions by imagining a decline in a particular factor. How would that impact your business? Now imagine an improvement in that factor. How would that impact your business? In selecting factors, limit your list to no more than seven. Why seven? Cognitive theory suggests that human minds are efficient at juggling from five to nine separate trains of thought - the average and oft- quoted number is seven. Our plan is for you to keep your eye on the ball, you want to limit the balls to those you can keep your eye on.

Step 2: Establishing the measurements

Your next step is to establish a measurement scale for each critical factor. Some of these measures will be quantitative; some qualitative. Sales are an easy one: dollars of revenue measured against budget. Leads generated is also easy - how many? You can further break down sales by product and leads by sources, or you can stick to the consolidated numbers. Choose the measure which best reflects your understanding of how the issue affects your business.

Everything is measurable; you just need the right system. How can you measure your effectiveness in sales compensation? You could establish a compound metric which includes total compensation as a percentage of sales revenue, juxtaposed against goal attainment. Marketing communications is also difficult. One way to measure this is to subjectively assess the quality of your marcom pieces; you could also measure whether you have the total complement of marcom pieces you require. Or, measure whether prospects respond to your marcom efforts. Most likely you will combine all three to get one measure.

A final example is measuring your efforts in the area of your Board of Directors / Board of Advisors. Measures include: do you have one? Are all the board seats filled? Is the board effective for your intended purpose? Measuring the Board factor would likely blend each of these.

Step 3: Setting the baseline

Once you've established a measurement structure for a factor, the next step is setting a baseline.
Each factor should be set against a normalizing scale ranging from 1 to 10. Subjectively this can translate into non-performing(1), poor (2-3) , mediocre (4-5), good (6-7), great (8-9), and outstanding (10). If your sales run-rate is $10 million, determine whether that is a 1, a 5, or a 10. Your answer depends of course on whether you consider performance against budget, performance against stretch goals, or performance against "home-run-out-of-the-park" goals.
If your baseline for Board of Directors is two unfilled board seats - is that a 5 (mediocre) or a poor (2-3)? Only you can decide. Although this ultimately is a subjective process, you want to make it as objective as possible.

Step 4: Set new goals

Next, create a "gap" between where you are - your baseline - and your target for that factor. You already have a sales plan, so your gap exists between your current revenue and your budgeted revenue. You may consider your baseline a 5, and your target an 8. Implicit in this 1- 10 scale are judgements about your intentions: will reaching your budgeted revenue put you at 8 (almost great) or 10 (outstanding)? Where do you want to peg your efforts? If you've assessed your employee training at a 4 (mediocre), are you shooting for a 7 (good) or a 9 (great)? You can see from this how your measurement structure and goal system will impact how you allocate your company's resources and energy.

Step 5: Closing the gap

You now have a baseline and a target for each factor. Between them they define a factor gap - your challenge is to close it. Each gap becomes the focus of a meditation which asks the question: What will close the gap between our current level of this factor and our desired level? What possible actions will raise that measurement? You may have intuitive responses to these questions, and when appropriate, trust your gut. If need be, back that gut response with research - but only when cost effective.

(Sometimes the most cost effective research is implementation, particularly in simple matters.)
Use any idea generation process you are comfortable with. Develop several possible initiatives to raise the level of that factor. With luck your ideas will work together and harmonize in terms of impact or implementation requirements. If you create competing ideas, select the best alternatives. Choose based on return on investment, required resources, scheduling conflicts, time to impact, total cost, and likelihood of success versus risk of failure.

Depending on the specific factor, and the size of the gap, you may plan to close it in stages or shoot the gap all at once. You can launch one initiative at a time, or implement several initiatives in parallel. You may find my GamePlan!" methods useful in designing your gap-closing programs.
Once you launch your gap-closing initiatives, continually measure your results. Report your progress to participants and stakeholders, and post it publicly.

Step 6: “The Ben Franklin Rotation Program”

Each factor also gets a weight, which enables you to develop an overall score. Each week, re-rate all the factors on the score sheet, and graph your progress. You may also graph the overall score. Publish the score sheet and the graphs. You can establish a reward system based on individual progress, or, using the factor weights, you can develop a bonus structure which incentivizes total progress. This simple system will focus your attention on improving each one of your critical success factors. With carefully selected factors, you insure both rapid performance increases and balance in your company. This system simply shows the projection of the progress, so as to monitor if you are improving or not. It’s one way also on assessing the firm’s response on the critical factors.

Generally, the advantages of identifying CSFs are that they are simple to understand; they help focus attention on major concerns; they are easy to communicate to coworkers; they are easy to monitor; and they can be used in concert with strategic planning methodologies. Using critical success factors as an isolated event does not represent critical strategic thinking. But when used in conjunction with a planning process, identifying CSFs is extremely important because it keeps people focused. Clarifying the priority order of CSFs, measuring results, and rewarding superior performance will improve the odds for long-term success as well.



Sources:

http://www.e-competitors.com/Strategy/SBUPlanning/SBUPositioning/SBU_Critical.htm
http://rapidbi.com/created/criticalsuccessfactors.html
http://www.paullemberg.com/criticalfactors.html



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Critical Success Factor (CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.

So many important matters can compete for your attention in business that it's often difficult to see the "wood for the trees". What's more, it can be extremely difficult to get everyone in the team pulling in the same direction and focusing on the true essentials. That's where Critical Success Factors (CSFs) can help. CSFs are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project.

By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project. As a common point of reference, CSFs help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.

The idea of CSFs was first presented by D. Ronald Daniel in the 1960s. It was then built on and popularized a decade later by John F. Rockart, of MIT's Sloan School of Management, and has since been used extensively to help businesses implement their strategies and projects.
Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways. This article provides a simple definition and approach based on Rockart's original ideas.

The advantages of identifying CSFs are that they are simple to understand; they help focus attention on major concerns; they are easy to communicate to coworkers; they are easy to monitor; and they can be used in concert with strategic planning methodologies. Using critical success factors as an isolated event does not represent critical strategic thinking. But when used in conjunction with a planning process, identifying CSFs is extremely important because it keeps people focused. Clarifying the priority order of CSFs, measuring results, and rewarding superior performance will improve the odds for long-term success as well.

Critical success factors cannot be specifically defined for the masses because success can be defined quite differently by each individual, and for the goal at hand. Therefore, in order to identify critical success factors, it is first necessary to come to terms with your own personal definition of success. Each individual’s own definition of will be influenced by several key factors:

• Success is subject to individual interpretation based on upbringing, past experiences, role models, personal motivations and goals. For some it might be to own a home in an upscale neighborhood, while for others it might be a career in the Peace Corps. Carefully contemplate your definition of success based on your values—not what your brother-in-law or Madison Avenue tells you it is. Your own definition of personal success directly influences critical factors leading to that success.

• Your view of success will change at various times throughout your life. For example, what might be deemed successful in college or on your first job is very different from successfully raising a family or comfortably retiring in the Caribbean. Your definition of success will continue to change, so don’t make the error of pursuing an outdated version of it. Success factors will change over time.

• Personal success is sometimes measurable and sometimes not. Accumulating a certain amount of wealth is one way to measure success, but it is not the only way; a successful marriage may be far more meaningful to many people and can only be measured by how the two partners feel about each other as the years go by.

• Very few people achieve success accidentally. Most people who achieve success first defined it then planned for it; they set a goal to achieve it. Critical success factors change with the goal.

These factors represent environment in which company operates. They include things like the business climate, the economy, competitors, sociopolitical issues, technological improving and so on.
Objective: Expand assortment of goods to attract more consumers.
CSF: Discovery of new required local suppliers, arrangement of win-win relationship with them.

There are five business success factors (critically important core profit principles) that all businesses share - both small business and large. In times of economic crisis like these, they are essential. And, they can make the difference between just getting by - or you getting ahead in your business.

Here, we'll explore what they are - and how you can put them to work for you in your own business. These principles form the basis for most success in business achieved by entrepreneurs, business owners, business managers, and professionals. Without following them at least to some extent, you'll find business to be a struggle - and much less rewarding than it could be.

As you read this, see how well your own thinking and actions in business stack up to these five core principles:

You don't have to look far to find examples of businesses imploding due to lack of profits. (The current banking and financial crisis immediately comes to mind... Or, remember the dot-com bubble?... the spend, spend, spend your way to market share type of thinking.) And, those are just some larger, more visible examples... small businesses are at even more risk.

Ultimately, profits are the essential key ingredient for business survival - and your focus on them is key. The very existence of your business depends on a steady-stream of profits... to pay your bills... your salary... your employees... your vendors and suppliers... and to secure your financial future.

Profits make the difference between the success or failure of your enterprise. They're the essence of being in business and are the fruits of your labor. Without profits (or deep pockets), you can't last long.

Here again, you won't have to look far for examples. Just think of all the leads that don't get proper follow-up, the customers/clients that receive only occasional communications (if any), the up-sells, cross-sells and add-on sales that could have been part of a given transaction, the unrealized intangible opportunities that exist in your customer/client or vendor/supplier relationships - and you can begin to see a sad pattern.

It's a pattern of profit opportunities gone by... wasted utilization of assets... or under-realized profit potential in your transactions. In many cases, business owners, managers and professionals are completely unaware of their lost profit opportunities.

Make your expenditure of time, energy, capital, and resources produce more for you - and capture the money that most businesses miss. Think about your sales, marketing, and advertising process as a total package - and create, test, and put in place processes that take advantage of strengths in your business.

Do you have a number of different sources within your business to support you? Or, are you relying on only a few? Or, even worse, relying on only ONE primary source of profit?

The majority of businesses rely on fewer than five profit sources - and think in terms of "profit centers." In other words, a collection of different channels of profit from individual sales of products or services (retail), bulk sales (wholesale), joint ventures, ownership interests, licensing and/or other arrangements, and so on.

But, when you create a "Web of Profits" in your business - that is, an interconnected approach that integrates a variety of profit sources and activities together into a single unit of functionality - you stand a better chance of leveraging your business in new ways.

In times of recession or economic crisis, sometimes cost-cutting is the only logical and sane option. If you're bleeding... you stop the bleeding before anything else. But, when it comes to cost-cutting, the effect is temporary and fleeting. Once you've drastically reduced your expenses, any additional cost-cutting might hurt your business's effectiveness and viability.

Crisis management aside, it's much better to focus on getting more business, to create new profit sources, run better promotions, do better advertising and marketing, and generally operate your business in a more customer/client oriented way.

That's what eases the pressure from high-costs... and provides you with what you need from your business. The thinking that goes into a profit-oriented focus and mindset can often provide innovative and inspirational breakthroughs in results.

Being laser-focused on profits - rather than your strategic planning being primarily focused on revenue - takes you to the next level in your business plan. You'll be able to see alternative profit possibilities - and the action steps needed - so you can build them directly into your plan.

By their very nature, business plans focus on the bottom-line - and usually they just focus on the obvious sources - not necessarily on the alternative profit possibilities. And it's these alternative profits that most businesses miss... profits that could even eclipse what's being produced by your current business activities.

According to wikipedia Critical Success Factor (CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.

So many important matters can compete for your attention in business that it's often difficult to see the "wood for the trees". What's more, it can be extremely difficult to get everyone in the team pulling in the same direction and focusing on the true essentials.

That's where Critical Success Factors (CSFs) can help. CSFs are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project.

By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project.

As a common point of reference, CSFs help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.

The idea of CSFs was first presented by D. Ronald Daniel in the 1960s. It was then built on and popularized a decade later by John F. Rockart, of MIT's Sloan School of Management, and has since been used extensively to help businesses implement their strategies and projects.

Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways. This article provides a simple definition and approach based on Rockart's original idea.

Critical success factors (CSFs) have been used significantly to present or identify a few key factors that organisations should focus on to be successful. As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organisation” (Rockart and Bullen, 1981). Identifying CSFs is important as it allows firms to focus their efforts on building their capabilities to meet the CSFs, or even allow firms to decide if they have the capability to build the requirements necessary to meet critical success factors (CSFs).


Success factors were already being used as a term in management when Rockart and Bullen reintroduced the concept to provide greater understanding of the concept and, at the same time, give greater clarity of how CSFs can be identified.

MAIN ASPECTS OF CSFs

CSFs are tailored to a firm's or manager's particular situation as different situations (e.g. industry, division, individual) lead to different critical success factors. Rockart and Bullen presented five key sources of CSFs: the industry, competitive strategy and industry position, environmental factors, temporal factors, and managerial position (if considered from an individual's point of view). Each of these factors is explained in greater detail below.

HOW TO WRITE GOOD CSFs

In an attempt to write good CSFs, a number of principles could help guide writers. These principles are:

• Ensure a good understanding of the environment, the industry and the company – It was shown that CSFs have five primary sources, and it is important to have a good understanding of the environment, the industry and the company in order to be able to write them well. These factors are customised for companies and individuals and the customisation results from the peculiarity of the organisation. This peculiarity stems from an organisation's strategy, current position, and resources and capabilities.
• Build knowledge of competitors in the industry – While this principle can be encompassed in the previous one, it is worth highlighting separately as it is critical to have a good understanding of competitors as well in identifying an organisation's CSFs. Knowing where competitors are positioned, what their resources and capabilities are, and what strategies they will pursue can have an impact on an organisation's strategy and also resulting CSFs.
• Develop CSFs which result in observable differences – A key impetus for the development of CSFs was the notion that factors which get measured are more likely to be achieved versus factors which are not measured. Thus, it is important to write CSFs which are observable or possibly measurable in certain respects such that it would be easier to focus on these factors. These don't have to be factors that are measured quantitatively as this would mimic key performance indicators; however, writing CSFs in observable terms would be helpful.
• Develop CSFs that have a large impact on an organisation's performance – By definition, CSFs are the "most critical" factors for organisations or individuals. However, due care should be exercised in identifying them due to the largely qualitative approach to identification, leaving many possible options for the factors and potentially results in discussions and debate. In order to truly have the impact as envisioned when CSFs were developed, it is important to thus identify the actual CSFs, i.e. the ones which would have the largest impact on an organisation's (or individual's) performance.


Conclusion

CSFs are used by organisations to give focus on a number of factors that help define its success. They help the organisation and its personnel to understand the key areas in which to invest their resources and time. Ideally, these CSFs are observable in terms of the impact on the organisation to allow it to have guidance and indications on its achievement of them.

CSFs can be utilised in both the organisation and the individual levels. Their identification is largely qualitative and can result in differing opinions in pinpointing them. Nevertheless, it is an approach that should be pursued as it provides value in giving due focus to a limited set of factors, which are deemed to be the most critical for an organisation or individual.

The company should have a critical success factors in order to know the improvement made by the company from the past up to the present generation. This is possible to every organization even to a smaller unit of business to maintain its progress and limits its capacity. This would show that critical success factors indeed contribute a big help to individuals not only for a certain corporation but also to a person.

Success is many things to many people. Worldbook defines success as a favorable result or wished for ending through the achievement of goals. That is, if one attains a desired goal through achievement, he would be considered a success. However, a successful character, cannot be produced from one successful feat. The true indicator of success is not what is accomplished, but what is felt. In order to be successful, one must be happy.
One of the most complex examples of success is the winning of money. Is the winning of money considered successful? If a person buys a lottery ticket, he is setting his goal on winning. In addition, if the person wins, he is obviously happy. However, this person is not considered successful. Although his goal is to win, he has no control over winning or losing. Achieving goals means working for them and knowing the result. The person is going to be elated about winning but not about achieving goals. Happiness from success results from the achievements accomplished.


Source:
http://www.coursework4you.co.uk/essays-and-dissertations/critical-success-factors.php


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The idea of identifying critical success factors as a basis for determining the information needs of managers was proposed by Daniel (1961) but popularized by Rockart (1979). The idea is very simple: in any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so. Rockart (1979: 85), by referring to Daniel (1961), gives the following as an example of the CSFs: new product development, good distribution, and effective advertising for the food processing industry - factors that remain relevant today for many firms.

Competitive advantage, following Porter (1985), was taken to mean, the ability of a firm to provide better value for its customers through lower prices, higher quality, or benefits not available elsewhere. The primary purpose was to test the idea that the information intensive areas of an organization could be identified within the value chain by using the CSF technique to indicate the critical areas and, thereby, enable the identification of corporate information needs. Corporate information needs were defined as those needs for information that must be
satisfied if the organization is to achieve its strategic aims. The proposition was that those parts of the value chain that were perceived by organizational members to be of critical significance would be the areas in which effort ought to be concentrated so that the information systems could be effective.

The case studies were carried out in UK universities by applying a qualitative research strategy simultaneously with the cases testing the SIM methodology in the pharmaceutical and publishing sectors in Finland. Qualitative, open-ended interviews were conducted to identify the critical areas, related information needs and the use of information systems. Grounded theory was applied to define the CSFs in both the UK and Finnish studies. An understanding of the production, marketing and managerial processes within the Finnish companies and the market conditions within which the companies operated was gained by an examination of relevant documentation. The SIM study relied on theoretical sampling – the cases were chosen for replicating the test to provide examples from very knowledge-based fields of polar types in order to ensure valid findings.

Critical Success Factor (CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.

Critical success factors can be defined as those issues which are deemed important to the organization, with regard to its present and future performance, and also to its stakeholders. These few key factors are unique for achievement of its vision and might be specific to the industry in which it operates. Critical success factors define few areas of performance that are essential for the organization to accomplish its mission.

In other words these are the factors that are critical to the success of the organization and positive results with respect to these factors are absolutely necessary for an organization to achieve its vision, remain competitive and succeed in the industry.

The business environment is changing dramatically and in order to stay competitive in the market, organizations must improve their business practices and procedures. Organizations within all departments and functions upgrade their capability to generate and communicate accurate and timely information. The organizations which have successfully implemented the ERP systems are reaping the benefits of having integrating working environment, standardized process and operational benefits to the organization. Not all ERP implementations have been successful.

CONCEPTUAL DOMIANS OF CSFS FOR ERP IMPLEMENTATION
Since the model constructs are latent variables, which cannot be measured directly, multi-item scales, each composed of a set of individual items, were needed to obtain indirect measures of each construct. The items listed in this section represent the scales as drawn from the practitioners, and refined through an expert judge-based manual sorting process . These scales were further refined (and some items were dropped) as a result of an empirical test of a survey instrument containing these initial scales.

Critical success factors (CSF) are widely used in the information systems arena . CSFs can be understood as the few key areas where things must go right for the implementation to be successful. Past studies have identified a variety of CSFs for ERP implementation, among which context related factors consistently appear. Following are the commonly identified CSFs identified by several researchers and are pertinent for the success of ERP implementation project.

3.1 Project Management
Project Management involves the use of skills and knowledge in coordinating the scheduling and monitoring of defined activities to ensure that the stated objectives of implementation projects are achieved. The formal project implementation plan defines project activities, commits personnel to those activities, and promotes organizational support by organizing the implementation process.

3.2 Business Process Reengineering
Another important factor that is critical for the success of ERP implementation is the Business Process Reengineering. It is defined by as“the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service and speed”. Organizations should be willing to change their businesses to fit the ERP software in order to minimize the degree of customization needed. The implementation of ERP requires examination of many business processes, which believed to be one of the important and beneficial results of the implementation of ERP system.

3.3 User training and education
In ERP implementation process many projects fail in the end due to lack of proper training. Many researchers consider users training and education to be an important factor of the successful ERP implementation. The main reason for education and training program for ERP implementation is to make the user comfortable with the system and increase the expertise and knowledge level of the people. ERP related concept, features of ERP system, and hands on training are all important dimensions of training program for ERP implementation. Training is not only using the new system, but also in new processes and in understanding the integration within the system – how the work of one employee influences the work of others.

3.4 Technological infrastructure
It argued that adequate IT infrastructure, hardware and networking are crucial for an ERP system’s success. It is clear that ERP implementation involves a complex transition from legacy information systems and business processes to an integrated IT infra-structure and common business process throughout the organization. Hardware selection is driven by the firm’s choice of an ERP software package. The ERP software vendor generally certifies which hardware (and hardware configurations) must be used to run the ERP system. This factor has been considered critical by the practitioners and as well as by the researchers.

3.5 Change management
Change management is a primary concern of many organizations involved in ERP project implementation. Many ERP implementations fail to achieve expected benefits, possibly because companies underestimate the efforts involved in change management. Identify organizational change is the body of knowledge that is used to ensure that a complex change, like that associated with a new big information system, gets the right results, in the right timeframe, at the right costs. Generally, one of the main obstacles facing ERP implementation is resistance to change. It points out that the resistance to change is one of the main hurdles faced by most companies. Resistance can be destructive since it can create conflicts between actors, it can be very time consuming. To implement an ERP systems successfully, the way organizations do business will need to change and ways people do their jobs will need to change as well [12].[13] propose the recurring improvisational change methodology as a useful technique for identifying, managing, and tracking changes in implementing an ERP system. Change Management is important and one of the critical success factors identified in the literature. It is imperative for success of implementation project starting at the initial phase and continuing throughout the entire life cycle.

3.6 Management of Risk
Every Information technology implementation project carries important elements of risk; hence it is probable that progress will deviate from the plan at some point in the project life cycle. ERP implementation project risks are described as uncertainties, liabilities or vulnerabilities that may cause the project to deviate from the defined plan. Risk management is the competence to handle unexpected crises and deviation from the plan [14]. The implementation of ERP system project is characterized as complex activity and involves a possibility of occurrence of unexpected events. Therefore, risk management is to minimize the impact of unplanned incidents in the project by identifying and addressing potential risks before significant consequences occur. It is understood that the risk of project failure is substantially reduced if the appropriate risk management strategy is followed.

3.7 Top Management Support
Top management support has been consistently identified as the most important and crucial success factor in ERP system implementation projects. It defines top management to provide the necessary resources and authority or power for project success. Top management support in ERP implementation has two main facets: (1) providing leadership; and (2) providing the necessary resources. To implement ERP system successfully, management should monitor the implementation progress and provide clear direction of the project. They must be willing to allow for a mindset change by accepting that a lot of learning has to be done at all levels, including themselves.

3.8 Effective Communication
Communication is one of most challenging and difficult tasks in any ERP implementation project. It is considered a critical success factors for the implementation of ERP systems by many authors. It is essential for creating an understanding, an approval of the implementation and sharing information between the project team and communicating to the whole organization the results and the goals in each implementation stage. In addition to gaining approval and user acceptance, the communication will allow the implementation to initiate the necessary final acceptance. The communication should start early in the ERP implementation project and can include overview of the system and the reason for implementing it be consistent and continuous.

3.9 Team work and composition
ERP team work and composition is important throughout the ERP implementation project. An ERP project involves all of the functional departments and demands the effort and cooperation of technical and business experts as well as end-users. According to a survey conducted by [6], ERP implementation team comprises of, functional personnel and management, IT personnel and management, top management, IT consultants, ERP vendor , parent company employees, management consultants, hardware vendor.

The ERP team should be balanced, or cross functional and comprise a mix of external consultants and internal staff so the internal staff can develop the necessary technical skills for design and ERP implementation. According to survey, having competent members in the project team is the fourth most important success factor for IS implementation. Further, the members of the project team(s) must be empowered to make quick decisions.

Reference:
http://www.it-innovations.ae/iit005/proceedings/articles/F_4_IIT05_Bhatti.pdf

Identify and discuss the steps for "critical success factors" approach? (at least 1,500 words)

So many important matters can compete for your attention in business that it's often difficult to see the "wood for the trees". What's more, it can be extremely difficult to get everyone in the team pulling in the same direction and focusing on the true essentials.

That's where Critical Success Factors (CSFs) can help. CSFs are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project.

By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project.

As a common point of reference, CSFs help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.

The idea of CSFs was first presented by D. Ronald Daniel in the 1960s. It was then built on and popularized a decade later by John F. Rockart, of MIT's Sloan School of Management, and has since been used extensively to help businesses implement their strategies and projects.

Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways. This article provides a simple definition and approach based on Rockart's original ideas.
Rockart defined CSFs as:

"The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization's efforts for the period will be less than desired."

He also concluded that CSFs are "areas of activity that should receive constant and careful attention from management."

Critical Success Factors are strongly related to the mission and strategic goals of your business or project. Whereas the mission and goals focus on the aims and what is to be achieved, Critical Success Factors focus on the most important areas and get to the very heart of both what is to be achieved and how you will achieve it.

CSFs are best understood by example. Consider a produce store "Farm Fresh Produce", whose mission is:

"To become the number one produce store in Main Street by selling the highest quality, freshest farm produce, from farm to customer in under 24 hours on 75% of our range and with 98% customer satisfaction."

The strategic objectives of Farm Fresh are to:

• Gain market share locally of 25%.
• Achieve fresh supplies of "farm to customer" in 24 hours for 75% of products.
• Sustain a customer satisfaction rate of 98%.
• Expand product range to attract more customers.
• Have sufficient store space to accommodate the range of products that customers want.

In order to identify possible CSFs, we must examine the mission and objectives and see which areas of the business need attention so that they can be achieved. We can start by brainstorming what the Critical Success Factors might be (these are the "Candidate" CSFs.)

Objective---Candidate Critical Success Factors

Gain market share locally of 25%---Increase competitiveness versus other local stores
---Attract new customers

Achieve fresh supplies from "farm to customer" in 24 hours for 75% of products---Sustain successful relationships with local suppliers

Sustain a customer satisfaction rate of 98%---Retain staff and keep up customer-focused training

Expand product range to attract more customers---Source new products locally

Extend store space to accommodate new products and customers---Secure financing for expansion
---Manage building work and any disruption to the business

Once you have a list of Candidate CSFs, it's time to consider what is absolutely essential and so identify the truly Critical Success Factors.

And this is certainly the case for Farm Fresh Produce. One CSF that we identify from the candidate list is "Sustain successful relationships with local suppliers." This is absolutely essential to ensure freshness and to source new products.

Another CSF is to attract new customers. Without new customers, the store will be unable to expand to increase market share.

A third CSF is financing for expansion. The store's objectives cannot be met without the funds to invest in expanding the store space.

Tip: How Many CSFs?

Whilst there is no hard and fast rule, it's useful to limit the number of CSFs to five or fewer absolute essentials. This helps you maintain the impact of your CSFs, and so give good direction and prioritization to other elements of your business or project strategy.

In reality, identifying your CSFs is a very iterative process. Your mission, strategic goals and CSFs are intrinsically linked and each will be refined as you develop them.

Here are the summary steps that, used iteratively, will help you identify the CSFs for your business or project:

Step One: Establish your business's or project's mission and strategic goals (click here for help doing this.)

Step Two: For each strategic goal, ask yourself "what area of business or project activity is essential to achieve this goal?" The answers to the question are your candidate CSFs.

Tip: How Many CSFs?

To make sure you consider all types of possible CSFs, you can use Rockart's CSF types as a checklist.

• Industry - these factors result from specific industry characteristics. These are the things that the organization must do to remain competitive.
• Environmental - these factors result from macro-environmental influences on an organization. Things like the business climate, the economy, competitors, and technological advancements are included in this category.
• Strategic - these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.

Temporal - these factors result from the organization's internal forces. Specific barriers, challenges, directions, and influences will determine these CSFs. Step Three: Evaluate the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Criticial Success Factors.

As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission, objectives and CSFs iteratively.

Step Four: Identify how you will monitor and measure each of the CSFs.

Step Five: Communicate your CSFs along with the other important elements of your business or project's strategy.

Step Six: Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable goals, it is useful to identify as specifically as possible how you can measure or monitor each one.

Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals.

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This assignment is for me to identify and discuss the steps for critical success factors. According to Wikipedia and other sources, the following sre the definition of CSF.

Critical Success Factor (CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.
http://en.wikipedia.org/wiki/Critical_success_factor

Critical Success Factors have been used significantly to present or identify a few key factors that organizations should focus on to be successful.
As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization”.
http://rapidbi.com/created/criticalsuccessfactors.html#WhatareCSFs

The idea of identifying critical success factors as a basis for determining the information needs of managers was proposed by Daniel (1961) but popularized by Rockart (1979). The idea is very simple: in any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so. Rockart (1979: 85), by referring to Daniel (1961), gives the following as an example of the CSFs: new product development, good distribution, and effective advertising for the food processing industry - factors that remain relevant today for many firms. The CSFs approach was applied in case studies carried out in the UK universities. It was applied also as a component of a strategic information management (SIM) methodology put forward by Wilson (1992, 1994b). The CSFs approach was combined with the value chain concept by Porter (1985) in order to form an information audit. The methodology was tested in two case studies carried out in very knowledge-intensive sectors of Finnish industry. The process was funded by the Academy of Finland.
http://informationr.net/ir/6-3/paper108.html

Types of Critical Success Factor

There are four basic types of CSF's
They are:
1. Industry CSF's resulting from specific industry characteristics;
2. Strategy CSF's resulting from the chosen competitive strategy of the business;
3. Environmental CSF's resulting from economic or technological changes; and
4. Temporal CSF's resulting from internal organizational needs and changes.

Things that are measured get done more often than things that are not measured.
Each CSF should be measurable and associated with a target goal. You don't need exact measures to manage. Primary measures that should be listed include critical success levels (such as number of transactions per month) or, in cases where specific measurements are more difficult, general goals should be specified (such as moving up in an industry customer service survey).

Definitions

Critical Success Factor
an element of organizational activity which is central to its future success. Critical success factors may change over time, and may include items such as product quality, employee attitudes, manufacturing flexibility, and brand awareness. This can enable analysis.

Critical Success Factor
any of the aspects of a business that are identified as vital for successful targets to be reached and maintained. Critical success factors are normally identified in such areas as production processes, employee and organization skills, functions, techniques, and technologies. The identification and strengthening of such factors may be similar. ..

Critical Success Factor (CSF) or Critical Success Factors
is a business term for an element which is necessary for an organization or project to achieve its mission. For example, a CSF for a successful Information Technology (IT) project is user involvement.
Using the term
The term “Critical Success Factor” is used differently, due to ambiguity of the word “critical”,
back and forth translations into other languages and interpretation when analyzed in portfolios:
1. Definition 1: “critical” = important, key, determining, vital, strategic, etc.
2. Definition 2: “critical” = alarming, anxious, etc. (as shown within the diagram = top left):
Which ever definition you use. make sure that all managers understand the definition.

Five key sources of Critical Success Factors
MAIN ASPECTS OF Critical Success Factors and their use in analysis
CSF's are tailored to a firm's or manager's particular situation as different situations (e.g. industry, division, individual) lead to different critical success factors. Rockart and Bullen presented five key sources of CSF's:

1. The industry,
2. Competitive strategy and industry position,
3. Environmental factors,
4. Temporal factors, and
5. Managerial position (if considered from an individual's point of view). Each of these factors is explained in greater detail below.

In reality, identifying your CSFs is a very iterative process. Your mission, strategic goals and CSFs are intrinsically linked and each will be refined as you develop them.

Here are the summary steps that, used iteratively, will help you identify the CSFs for your business or project:

Step One: Establish your business's or project's mission and strategic goals.
Step Two: For each strategic goal, ask yourself "what area of business or project activity is essential to achieve this goal?" The answers to the question are your candidate CSFs.
Step Three: Evaluate the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Criticial Success Factors.

As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission, objectives and CSFs iteratively.

Step Four: Identify how you will monitor and measure each of the CSFs.

Step Five: Communicate your CSFs along with the other important elements of your business or project's strategy.

Step Six: Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable goals, it is useful to identify as specifically as possible how you can measure or monitor each one.

Key Points
Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals.

Tip: How Many CSFs?
To make sure you consider all types of possible CSFs, you can use Rockart's CSF types as a checklist.
• Industry - these factors result from specific industry characteristics. These are the things that the organization must do to remain competitive.
• Environmental - these factors result from macro-environmental influences on an organization. Things like the business climate, the economy, competitors, and technological advancements are included in this category.
• Strategic - these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.
• Temporal - these factors result from the organization's internal forces. Specific barriers, challenges, directions, and influences will determine these CSFs.
http://rapidbi.com/created/criticalsuccessfactors.html

With the steps discussed above critical success factor are probably essential for every organization. The steps in CFS allow an organization to plan of how to attain success without any problems.

Identify and discuss the steps for "critical success factors" approach?

Most Critical Success Factors identified are:

• Money factors: positive cash flow, revenue growth, and profit margins.
• Acquiring new customers and/or distributors -- your future.
• Customer satisfaction -- how happy are they?
• Quality -- how good is your product and service?
• Product or service development -- what's new that will increase business with existing customers and attract new ones?
• Intellectual capital -- increasing what you know that's profitable.
• Strategic relationships -- new sources of business, products and outside revenue.
• Employee attraction and retention -- your ability to do extend your reach.
• Sustainability -- your personal ability to keep it all going



Five CSF Approach by Auerbach Analysis:

1. Management commitment to the project

Management commitment to the project was described as the level of importance that upper-level management placed on the successful completion of the project. In general, management commitment refers to the emotional or psychological obligation that upper management demonstrates toward the project. It is not surprising that management commitment was selected as the most important factor when all the factors were considered.

Not only does management commitment drive individuals to perform because they wish to achieve recognition from their superiors, but management commitment is directly linked to whether adequate financial, human, and technology resources would be available.

Several things can be done to ensure that a project has adequate management commitment prior to the project’s launch. One is to require the presence of a champion for the project. A champion is a high-level manager within the organization who acts as sponsor and leader for the project. The champion should possess enough clout within the organization to gain necessary resources and exposure for the project to succeed.

The champion should also be held accountable for the success or failure of the project. In larger organizations, the champion should be required to hold an official high-level position. In smaller organizations, the champion for any IS project of significance should be the president or CEO. Few projects should proceed past a feasibility stage without a champion’s signature on a project proposal.

Another way to ensure management commitment to a project prior to IS requirements gathering is to have a formal project proposal process in place. This process should include the feasibility analysis (including economic, technical, and human resources aspects) and some type of capital budgeting or investment comparison that will clearly show the financial returns for the project.

For smaller firms, at least a cost/benefit analysis should be performed and the payback period and break-even point for the IT investment should be estimated and compared to other investment opportunities. The final step of this process is approval of the proposal by management that will be held accountable for the project’s success or failure.

One last approach to improve management commitment to a project is to clearly communicate the importance of the project to all the departments, divisions, work groups, etc., by having a kick-off event or information session sponsored by the manager whose span of control covers all of these areas. This will send the clear message to the managers, users, and IT personnel involved that the project has the backing of high-level management.

Alternatively, a letter or e-mail communication from the CEO or CIO may achieve the same result if it is specific in explaining the outcomes to be achieved and the importance of the project.


2. Interaction between users and IS personnel

Interaction between users and IS personnel was described as the quantity and quality of communication and the amount of group activities performed, including feedback from and to one another during the process. Interaction is distinguished from communication by the inclusion of other behaviors being performed jointly by the users and IS personnel.

Perhaps the most interesting aspect of this factor is that there is an inverse relationship between the quantity of interaction between users and IS personnel and the quality of this interaction. Apparently, when more time is needed for users and IS personnel to interact during a project, it is a symptom of other problems. That is, unusually greater amounts of interaction between users and IS personnel have a negative impact on the quality of the information obtained.

The rationale for this phenomenon is that when there are other “issues” not directly relevant to the IS requirements being addressed, a greater amount of time is spent communicating or interacting during the requirements-gathering process. Therefore, increased levels of communication (i.e., more meetings than is normally expected or a higher number of conference calls or personal visits among team members) may indicate other problems with the project (a lack of understanding of requirements, politics, etc.) that may impact the success of the project.

To improve the quality of interaction among users and IS personnel during IS requirements gathering, managers have several alternatives. One is to take advantage of joint application development (JAD) or other group meeting techniques that use a neutral facilitator to run structured meetings to gather requirements. A good facilitator should be able to keep the user and IS participants focused on the goal of specifying the IS requirements.

Another option to improve interaction is the careful assignment of members to the project team. The selection of users and IS personnel with personal interest in the new system improves the chances for success.

Related to this is the importance of selecting user representatives who have a superior knowledge and understanding of the business processes that are to be supported by the new system. One expert has suggested the rule of thumb is to assign the person that the department can least afford to miss for any period of time.

In addition, it has been suggested that assigning IS developers to the functional areas to perform the tasks to be supported by the new system also improves the quality of interaction between users and IS personnel. By performing the tasks in a functional area, IS personnel develop a deeper understanding of the business processes and gain an appreciation for the functions and features needed in the new system as well as the constraints that may impact a computer-based system.


3. Goal congruence among IS, users, and management

Defined as the agreement among management, user groups, and the IS department on the purpose of the project and the deliverables to be produced, goal congruence was rated the third most important factor to successful IS requirements gathering. This factor is directly affected by the existence and quality of a feasibility study and plan.

The feasibility study should include information regarding the scope of the system and the goals to be achieved. In general, both explicit and implicit goals are associated with every project, and to be successful, substantive agreement is needed on these goals.

This factor may also be affected by the interaction among users and IS personnel discussed above. It is expected that high-quality interaction would lead to a high level of goal congruence. However, goal congruence is clearly a distinct factor as the interaction may be high quality, but there still may be misunderstanding or conflict among the stakeholders with regard to the goals of the project.

Another aspect of goal congruence is the difficulty encountered when more than one user area is involved with the project. Today, almost every information system in an organization impacts more than one functional area (some touch on every area, e.g., ERP systems). Usually, these different functional groups can have different, if not competing, requirements for the system. This makes the achievement of goal congruence more difficult. This is not intended to mean that a system cannot meet multiple goals. However, all of the goals of the project should be made explicit, public, and as concrete as possible.

Finally, there may exist unseen or hidden goals. These hidden agendas could come from any area, such as management, IS, or user groups, and could be benign and legitimate or could be intended to sabotage or damage the project. In general, the best approach to achieve goal congruence is to explicitly recognize and describe the goals and to restrict the scope of the project to the fewest number of functional areas possible.


4. IS personnel’s understanding of the application

IS personnel’s understanding of the application is defined as how well the information systems personnel understand the purpose, the tasks, and the outputs of the work processes that the application is to support.

This is typically referred to as domain knowledge. The involvement of IS personnel—who have knowledge regarding the application domain for which requirements are being defined—greatly increases the ability of the team to correctly and quickly specify the requirements. Specifically, having IS personnel on the team who have had prior experience in the domain area (e.g., by developing similar applications or doing support work, or best of all, performing some of the users’ job functions) allows IS personnel to understand terminology and have a deeper understanding of the users’ needs.

The IS personnel’s level of domain knowledge would also be expected to positively impact the quality of the requirements-gathering process. By being familiar with the terms and business processes under study, semantic confusion should be avoided and communication improved.

However, there also may be negative effects of IS personnel experience and domain knowledge within a specific area. This may manifest in a form of bias. Bias has been defined as a willingness to change or to try new approaches or as the resistance to new ideas and change.

This second type of bias may be relevant because an IS developer may have been involved in earlier projects for the same system and be resistant to new ideas or technology or to doing things in ways different from before.

5. Planning

The planning factor was described as the amount of preparation performed for the IS requirements-gathering process and included the identification of specific tasks and the person responsible for performing them. Studies have shown that a work plan and schedule for completion are necessary for project success.

Reports of projects where an effort was nominally started without a specific plan or schedule, only to be forgotten in short order, are not unusual in most organizations. Also, stories abound where a project was begun with planned work activities and a schedule was laid out but no tasks were assigned to specific individuals, and everyone was surprised when the first set of milestones occurred and no work had been done.

The existence of a project champion and a formal project approval process, including a project plan, helps to ensure that planning activities take place. The presence of a project manager who is responsible for planning and tracking project activities and is accountable for the work being performed is highly recommended.

Reference:
http://www.techrepublic.com..com/search/Auerbach Analysis.html
http://csqa.info/

According to Wikipedia, Critical Success Factor (CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.

An organization or institution which is most profited organizations and institutions which is primarily exists to its stakeholders – the customers, employees, business partners, shareholder and communities that benefit from the organization’s existence and growth. The organization’s mission embodies this focus by stating the organization’s purpose, vision, and values. Stakeholders are best served when an organization operates in a method that ensures the mission is accomplished.

Accomplishing the mission in a logical and methodical way requires the organization to develop a strategy. The strategy encompasses a set of goals or targets that the organization must achieve in a specific period of time. These goals are changed into lower level strategic plans and activities to be carried out at various levels throughout the entire organization. This process of strategic planning provides a means for ensuring that the whole organization is focused on a shared purpose and vision.

There are lots definitions of Critical Success Factor provided by the RAPIDBI so that we can understand more what this is really about. To wit:

1. Critical Success Factor
an element of organizational activity which is central to its future success. Critical success factors may change over time, and may include items such as product quality, employee attitudes, manufacturing flexibility, and brand awareness. This can enable analysis.
2. Critical Success Factor
any of the aspects of a business that are identified as vital for successful targets to be reached and maintained. Critical success factors are normally identified in such areas as production processes, employee and organization skills, functions, techniques, and technologies. The identification and strengthening of such factors may be similar. ..
3. Critical Success Factor (CSF) or Critical Success Factors
is a business term for an element which is necessary for an organization or project to achieve its mission. For example, a CSF for a successful Information Technology (IT) project is user involvement.
Due to the word “critical” which made it ambiguous in the term Critical Success Factor, back and forth translations into other languages and interpretation were stressed out.
Definition 1: “critical” = important, key, determining, vital, strategic, etc.
Definition 2: “critical” = alarming, anxious, etc. (as shown within the diagram = top left):


Source: RAPIDBI


Source: RAPIDBI

Actually, there are four basic types of critical successful factors

They are:
1. Industry CSF's resulting from specific industry characteristics;
2. Strategy CSF's resulting from the chosen competitive strategy of the business;
3. Environmental CSF's resulting from economic or technological changes; and
4. Temporal CSF's resulting from internal organizational needs and changes.

As I surf over the internet, there are 7 critical success factors to make your ERP or IT project successful. We all know in the world of technology and business consulting is tainted by horror stories of ERP projects gone wrong. By the way, what is ERP? ERP stands for Enterprise Resource Planning. ERP is a way to integrate the data and processes of an organization into one single system. Usually ERP systems will have many components including hardware and software, in order to achieve integration, most ERP systems use a unified database to store data for various functions found throughout the organization.

The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. However, the use of ERP has changed and is extremely comprehensive, today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization - large or small.

In order for a software system to be considered ERP, it must provide an organization with functionality for two or more systems. While some ERP packages exist that only cover two functions for an organization (QuickBooks: Payroll & Accounting), most ERP systems cover several functions.

Today's ERP systems can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were all once stand alone software applications, usually housed with their own database and network, today, they can all fit under one umbrella - the ERP system.
Now, let’s enumerate what are these 7 critical success factors to make your IT projects successful:

1. Focus on business processes and requirements first. Too often, companies get tied up in the technical capabilities or platforms that a particular software supports. None of this really matters. What really matters is how you want your business operations to run and what your key business requirements are. Once you have this defined, you can engage in a more effective ERP software selection process.

2. Focus on achieving a healthy ERP ROI (Return on Investment), including post-implementation performance measurement. This requires doing more than just developing a high-level business case to get approval from upper management or your board of directors. It also entails establishing key performance measures, setting baselines and targets for those measures, and tracking performance after go-live. This is the only way to maximize the business benefits of ERP.

3. Strong project management and resource commitment. At the end of the day, your company owns the success or failure of a large ERP project, so you should manage it accordingly. This includes ensuring you have a strong project manager and your "A-players" from the business to support and participate in the project.

4. Commitment from company executives. Any project without support from it's top-management will fail. Support from a CIO or IT Director is fine, but it's not enough. No matter how well-run a project is, problems arise (such as conflicting business needs), so the CEO and your entire C-level staff needs to be on board to drive some of these

5. Take time to plan up front. An ERP vendor's motive is to close a deal as soon as possible. Yours should be to make sure it gets done right. Too often, companies jump right in to a project without validating the software vendor's understanding of business requirements or their project plan. The more time you spend ensuring these things are done right at the beginning of the project, the less time you'll spend fixing problems later on.

6. Ensure adequate training and change management. ERP systems involve big change for people, and the system will not do you any good if people do not understand how to use it effectively. Therefore, spending time on money on training, change management, job design, etc. is crucial to any ERP project.

7. Make sure you understand why you're implementing ERP. This is arguably the most important one. It's easy to see that many big companies are running SAP or Oracle and maybe you should too, but it's harder to consider that maybe you don't need an ERP system at all. Perhaps process improvement, organizational redesign, or targeted best-of-breed technology will meet your business objectives at a lower cost. By clearly understanding your business objectives and what you're trying to accomplish with an ERP system, you will be able to make a more appropriate decision on which route to take, which may or may not involve ERP.

Research shown that to complete a project successfully the following critical success factors apply:
1. Match Changes to Vision
2. Define Crisp Deliverables
3. Business Need Linked to Vision
4. Have a Formal Process to Define Vision
5. Organizational Culture Supports Project Management

You can have all of the above elements, but if you lack an engaged and involved business sponsor, your chances for success are greatly lessened.

According to a recent Gartner Institute study, 50% of all projects were delivered above schedule and/or budget.
Many projects were delivered with significant functionality missing, often cancelled after requirements definition.
In 2001, the Gartner group updated their research to include lack of executive sponsorship as a major contributor to project failures.

According to a 2000 Standish Group Report, the top success factors for projects were as follows. The list is in decreasing order of percentage factors responsible for success.

% - Success Factors
• 18% Executive support
• 16% User involvement
• 14% Experienced project manager
• 12% Clear business objectives
• 10% Minimized scope
• 8% Standard software infrastructure
• 6% Firm basic requirements
• 6% Formal methodology
• 5% Reliable estimates
• 5% Other criteria

Finally, Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoids wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals.
To read more what is CSF, follow this link: http://rapidbi.com/created/criticalsuccessfactors.html#CSFprojects

Resources:
http://it.toolbox.com/blogs/erp-roi/7-critical-success-factors-to-make-your-erp-or-it-project-successful-12058
http://www.tech-faq.com/erp.shtml